On May 14, 2024, the National Ministry of Finance simultaneously issued the “Notice on the Subsidy Fund Budget for the Improvement of Medical Services and Security Capabilities (Capacity Building of Medical and Health Institutions) in 2024” and the “Notice on the Subsidy Fund Budget for the Improvement of Medical Services and Security Capabilities (Comprehensive Reform of Public Hospitals) in 2024”. The two subsidy funds totaled 14.9882 billion yuan.
Following last year’s 8.98 billion yuan, the central government’s public hospital comprehensive reform subsidy fund will increase to 9.73 billion yuan in 2024, and the medical and health institution capacity building subsidy fund will be 5.258 billion yuan. The two major subsidies total 14.99 billion yuan, and the scale has reached a new high.
As an important support for the implementation of the “Key Tasks for Deepening the Reform of the Medical and Health System from 2022 to 2025”, this fund will bring significant benefits to the construction of key clinical specialties, the improvement of medical service capabilities in counties and remote areas, and the reform of public hospitals, and will definitely promote the purchase demand for related medical equipment.
On May 14, the Ministry of Finance issued the “Notice on the release of the 2024 subsidy budget for medical service and security capacity improvement (capacity building of medical and health institutions)” (hereinafter referred to as the “Notice”).
According to the “Notice”, this fund has been included in direct fund management to ensure that the identification, allocation, use and other aspects of fund allocation, allocation and use are clear and consistent. Each province needs to propose a plan for direct fund allocation to the grassroots level of cities and counties within 21 days after receiving the indicator document, and will release it after approval.
According to the subsidy fund allocation table, the total subsidy funds for capacity building of medical and health institutions in 2024 will be 5.258 billion yuan, a decrease from 6.2737 billion yuan in 2023.
On the same day, the Ministry of Finance also issued the “Notice on the 2024 Subsidy Fund Budget for the Improvement of Medical Service and Security Capacity (Comprehensive Reform of Public Hospitals)”. Subsidy funds for comprehensive reform of public hospitals are as high as 9.73 billion yuan, an increase from 2023.
In 2024, public hospital comprehensive reform subsidy funds will reach 9.73 billion yuan, which has been growing for many years in a row, reaching 8.9802 billion yuan in 2023 and 8.0392 billion yuan in 2022.
Focus on national key clinical specialties and other fields
The 5.258 billion yuan capacity building subsidy fund for medical and health institutions will accurately support 1,409 medical institutions in 31 provinces and cities across the country to improve their capabilities, including 254 national key clinical specialty construction projects, 930 county medical and health institutions, and 225 medical service capacity building projects in high-altitude areas.
Among them, 31 provinces and cities support the construction of 249 national key clinical specialties, with a subsidy of 5 million yuan for each project. Five cities under separate state planning, Liaoning, Zhejiang, Fujian, Shandong, and Guangdong, each support 1 project with a subsidy of 15 million yuan for each project;
For the national key rural revitalization counties, each county will receive a subsidy of 8 million yuan; for Tibet and Xinjiang, the subsidy will be 4 million yuan/county for poverty-stricken counties and 2 million yuan/county for non-poverty-free counties. One municipal hospital in each prefecture and city in high-altitude areas will be subsidized at the standard of 2 million yuan/hospital; one county-level hospital in each county will be subsidized with 1 million yuan/hospital based on the achievement of basic standards. If the standard is met, the subsidy will be 2 million yuan/hospital.
3.75 billion yuan to support the reform of model hospitals
Of the 9.73 billion yuan in public hospital comprehensive reform subsidy funds, up to 3.75 billion yuan will be invested to support public hospital reform and high-quality development demonstration projects.
According to the “Notice on Organizing the Application for Central Financial Support for Public Hospital Reform and High-Quality Development Demonstration Projects in 2023” issued earlier by the National Health Commission, during the period of deepening the reform of the medical and health system, the central government will provide subsidies to local governments for promoting comprehensive reform of public hospitals in accordance with regulations. The public hospital reform and high-quality development demonstration project mainly focuses on three aspects:
The first is to focus on improving the diagnostic and treatment capabilities of city and county-level public hospitals. Standardize diagnosis and treatment behavior, implement a hierarchical diagnosis and treatment system, support the construction of clinical specialties such as infectious diseases, mental illness, emergency and first aid, critical care medicine, cardiovascular and cerebrovascular, obstetrics and gynecology, pediatrics, etc. in public hospitals at the city and county levels, strengthen talent training, and create a number of key specialties in public hospitals at the city and county levels, so that major and serious diseases can be solved in the province, and common diseases can be solved in cities and counties, so as to alleviate the difficulty of medical treatment for the masses.
The second is to focus on strengthening the construction of smart hospitals. Promote the construction of smart hospitals and hospital information standardization of the “trinity” of electronic medical records, smart services, and smart management, support the establishment of information standards for the exchange and sharing of examination and test results in the region, reduce the number of examinations and tests performed by patients in different public hospitals, and allow the public to run less errands.
The third is to focus on controlling the unreasonable increase in medical expenses. Strengthen comprehensive budget management of hospitals, implement full-scale, full-process, and all-round budget performance management, strengthen budget constraints, deepen the reform of medical insurance payment methods, promote public hospitals to actively participate in the reform of centralized procurement and use of drugs and medical consumables, strengthen full-process cost control, promote the effective allocation and use of resources, and reduce the expensive burden of medical treatment on the public.
Domestic medical equipment welcomes big opportunities
According to the requirements of the State Council, public hospitals should give priority to domestic products when purchasing medical equipment.
According to the “Guiding Opinions on the Comprehensive Reform Pilot of Urban Public Hospitals” issued by the General Office of the State Council, public hospital reform also includes the implementation of hospital infrastructure and equipment procurement to ensure that corresponding large-scale medical equipment is equipped.
The document specifically states that when configuring medical equipment, public hospitals should give priority to domestic equipment.
Recently, the official website of the Henan Provincial Health Commission released the “Henan Provincial Public Medical and Health Institutions Large (Bulk) Medical Equipment Bidding and Procurement Management Measures (Trial)”, which reiterates that priority should be given to purchasing domestic equipment if the requirements are met.
The 14.8 billion financial subsidy will undoubtedly drive a new round of large-scale medical equipment upgrading.
Taking the grassroots level as an example, subsidy funds will be used to update CT, DR, color ultrasound, biochemical analyzers, defibrillators, monitors and other facilities and equipment, and will also be equipped with telemedicine equipment. According to estimates, the procurement demand for medical equipment in primary medical institutions is expected to exceed 10 billion yuan in 2024.
It can be seen that this 14.99 billion yuan in medical subsidy funds will definitely bring significant benefits to domestic medical device manufacturing companies, especially in the fields of key clinical specialty construction, county and remote medical care, etc. Domestic manufacturers with advantageous product lines such as imaging, testing, and first aid may usher in important development opportunities.
Innovative medical devices may benefit from expanded coverage
The allocation direction of this financial subsidy also reflects the current policy orientation of medical reform, focusing on key clinical specialties, grassroots and remote capacity improvement, sinking of high-quality medical resources, and the construction of digital smart hospitals.
Industry analysts point out that some innovative products may gain more room for market expansion.
For example, combined with the needs of key clinical specialties and telemedicine construction, new digital diagnosis and treatment products such as remote imaging diagnosis systems (AI-assisted diagnosis) and remote ECG cloud platforms are expected to benefit;
The reform of public hospitals will also drive the procurement of high-end equipment such as interventional surgery, surgical robots, and ICU ventilators;
The development of services such as remote consultation and Internet hospitals will also promote innovative fields such as 5G medical care and remote monitoring.
In general, the 14.99 billion yuan in medical subsidy funds directly addresses the pain points and difficulties of the current medical reform. In the future, there is still a lot of room for innovative development and upgrading of domestic medical device companies. In particular, domestic advantageous companies must not miss this major opportunity period.